top 5 affiliate marketing opportunities for 2006

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Top 5 Affiliate Marketing Opportunities for 2006

Affiliate Summit 2006

January 9, 2006

Anne Holland, Publisher, MarketingSherpa


The Hidden Success

$6.5 billion in 2005 (low estimate)

Smartest, most entrepreneurial marketers on the planet


Facts not Opinion: MarketingSherpa Methodology

Data for our reports, case studies and newsletters is gathered from:

776 affiliate marketers & merchants surveyed 5,000+ email & search marketers surveyed Eyetracking lab tests Research partnerships w/ dozens of vendors 500+ exclusive Case Studies


Source: MarketingSherpa Affiliate and Merchant Survey, August 2005

Affiliates & Search: Dramatic Shift

Views on how affiliates use TMs are changing fast.

Affiliates and Search

29%

39%

50%

21%

0% 10% 20% 30% 40% 50% 60%

We essentiallyoutsource our search

engine marketing to ouraffiliates, and we give

them free reign with TMsand branded terms.

We don't allow ouraffiliates to use our

TMs/branded terms inthe search engine

marketing.

January '05August '05


Affiliates & SearchOpportunity #1: News Releases

Source: Shawn Collins Consulting, December 2004

Press releases are for customers, not journalists.


Search News Opportunities by Niche

Optimized Release Activity by Industry

6.84%

18.22%

11.66%

3.70%

12.92%

3.03%

2.97%

0.99%

4.02%

2.44%

9.45%

7.24%

6.10%

5.88%

4.60%

4.01%

3.82%

3.72%

3.17%

21.05%

10.31%

7.10%

7.54%

5.27%

5.01%

4.22%

5.54%

2.67%

2.18%

23.73%

0% 5% 10% 15% 20% 25%

Entertainment

Computer/Electronics

Health

Auto

Banking/Finance

Retail

Food/Bev

Sports

Oil/Energy

Publishing

% of clickthroughs

% of page views

% of releasesoptimized

Source: PR Newswire Data, August, 2005


Keyword Volume - 2004/2005

9,100

14,700

17,314

-

5,000

10,000

15,000

20,000

Keywords for September, 2004 Keywords for March, 2005 Keywords for September, 2005

12 Month Growth Rate: 90%

6 Month Growth Rate: 36%

Source: MarketingSherpa, Search Marketing Benchmark Survey, August 2005 and MarketingSherpa, Search Marketing Metrics Survey, June 2004

E-LOAN says bid management no longer makes competitive difference

Affiliates & Search Dramatic change in PPC bidding


Affiliates & SearchOpportunity #2: Landing Pages

0.79%

6.31%

9.28%

11.81%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

Doesn't MatchKeyword

Home Page ofSite

Matches Themeof Keyword

Specific Matchto Keyword

Source: Atlas DMT, Search Listing URL and Conversion, 04/2004


Example: 30-50% conversion lift

Source: Atlas DMT, Search Listing URL and Conversion, 04/2004


Many landing pages still lame

Where Clicks Land - All Marketers

41%

32%

27%

45%

32%

24%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Special landing pages ormicrosite

Deep links within existing site Site home page

2004 2005

Source: MarketingSherpa, Search Marketing Benchmark Survey, August 2005 and MarketingSherpa, Search Marketing Metrics Survey, June 2004


Example: Tall Women’s Clothing


Example: Tall women’s clothing landing page


Which search terms are worth extra work on landing pages?

17%

60%

59%

30%

24%

8%

0% 10% 20% 30% 40% 50% 60% 70%

Tools from the Search Engines

Segmenting website log fileslooking for highly converting

keywords

Low ROI

MediumROI

Great ROI

Keyword Research ROI – 5+ Years Exp.

Source: MarketingSherpa, Search Marketing Benchmark Survey, August 2005


Affiliates & Email Marketing

Three Top Opportunities


58%

45%

37% 37%35%

33%30%

24%

19% 20% 19% 18%

0%

10%

20%

30%

40%

50%

60%

70%

0-30 days 31-60 days 61-90 days 4 - 6 months 6 months - 1 year 1 - 2 years

Open rate Clickthrough

Source: InformZ for MarketingSherpa, October 2005

Age of User Record

#1. Most actionable data:Opt-in recency affects response


Example: New opt-in campaign

Consider an educational 5-7x email series before sending clicks to merchants


#2. Unexpected success data:Co-registration opt-ins

30%

24%

14%

32%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Our co-reg names performabout as well as leadsfrom our own website.

Our co-reg names don'tpeform as well as our

website leads, but they'reworth it.

Our co-reg names aren'tperforming well.

We don't separate out theperformance of co-reg

names.

Source: MarketingSherpa, Email Marketing Benchmark Survey, October 2005


Example: co-registration


Vendor recommendation

Co-regComplete.com


#3. Eye-opening data:Segmentation worth the effort

Promotional Campaigns

Audience Size Segmented Not Segmented

Opens Clicks Opens Clicks

< 5K 50.50% 11.70% 5.60% 0.60%

5K–10K 48.80% 9.00% 3.90% 0.30%

10K–50K 28.50% 7.60% 4.00% 0.50%

50K–100K 13.40% 4.00% 3.70% 0.80%

> 100K 13.10% 1.10% 3.50% 0.20%

Averages 30.86% 6.68% 4.14% 0.48%

Source: Topica for MarketingSherpa, October 2005


Example: Multi-article vs single article ezine


Networking Guide for Affiliate Summit 2006

Who should you schmooze and how can you tell if they’ll be any good as partners?


Merchants’ Affiliate Growth Plans

7%

7%

43%

44%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

We plan to decrease our totalnumber of affiliates and focus

on our most profitable andaccountable affiliates.

We plan to keep our overallnumber of affiliates stable,but to replace inactive/poorquality affiliates with better

ones.

We plan to aggressively growour total number of affiliates.

We plan to slowly grow ouraffiliate stable, focusing on

the quality of each affiliate weadd.

% of Affiliate Program Managers



Picking the Best Affiliates:Merchant’s Revenue from Affiliates


4%

6%

7%

23%

51%

0% 10% 20% 30% 40% 50% 60%

Fewer than 20% of our affiliatesaccount for more than 75% of

revenue


revenue


revenue


revenue


revenue

% of Merchants' Affiliate Program Managers


What’s wrong with most affiliates?

Quality and Conduct Problems

32%

14%

10%

10%

7%

37%

20%

13%

19%

25%

19%

50%

45%

39%

43%

12%

16%

32%

32%

25%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Affiliates with irrelevant contentthat produces low-quality

leads.

Affiliates with questionablesearch marketing practices.

Affiliates with questionableemail marketing practices.

Fraud related to affiliateactivities (fake leads, CCard

fraud, click fraud, etc

Affiliates with content thatreflects poorly on your brand.

Very Common Somewhat Common Happens, but Uncommon Very Uncommon


Two Main Types of Affiliates:(vast oversimplification)

Branded

Niche/targeted

Audience/topic passion

Custom creative does better

Enthusiast pubs

Non-Branded

Mass distribution

Cash is king

Generic creative ok – but optimize it

Late night cable ads


Create more *true* partnerships

Marketing w/non-branded affiliatesElectronic Retailers AssnMultivariate & eyetracking testing

Marketing w/ branded affiliatesMore custom contentClick-didn’t-buy campaignsShared Web analytics

Affiliates partnering w/ each otherExit pops/DHTMLCo-registration


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